Wednesday, January 12, 2022
HomeBUSINESSHow To Secure A Loan With A Poor Credit Score?

How To Secure A Loan With A Poor Credit Score?

Most lenders give loans with only a good credit score. However, you are struggling to increase your credit score while trying to deal with your financial crisis. You would be looking for Poor credit loans.

With poor credit loans, you can avail yourself of loans despite having a poor credit score. The banker or lender may ask for evidence to support your financial responsibility. In addition, you can also have a joint loan with an individual who has a higher credit score.

If you are finding ways to secure a loan with a poor credit score, this post is for you. Read till the end to learn methods of availing yourself of a poor credit loan.

What Is a Poor Credit?

Poor credit refers to the financial history of an individual with unpaid or delayed payments of bills. In addition, a large amount of debt may also lead to poor credit. Bad credit is often calculated as a credit score for availing loans or borrowing money.

Credit scores range from 300 to 850. If you are under 650, you may have a bad credit score and lenders charge higher interests. You are eligible for poor credit loans if your credit score falls under 650.

  • Excellent: 760 to 850
  • Very Good: 700 to 759
  • Fair: 660 to 699
  • Poor: 620 to 659
  • Extremely poor: 620 to 300

How To Secure a Loan with A Poor Credit Score?

While over 13.7 million Australians have credit cards, 21% of Australians are denied a credit card for bad credit. However, through specific lending plans, you can avail yourself of a poor credit loan.

The following pointers highlight how you can secure a loan with a poor credit score.

Bring Your Lender into The Picture

Some individuals have a bad credit score due to genuine financial issues in the past.

In such a case, you can talk to the lender or banker you have been associated with. Additionally, you can provide evidence of financial status. Alternatively, you can also provide a salary hike or any other financial increment.

You may end with better credit terms despite having a poor credit score.

Always Choose Secure Loans

If you have been denied unsecured loans such as personal or credit card loans, you can try secured loans.

Lenders have lower credit risk in giving loans if adequate collaterals with enough liquidity back it. Thus, credit score has a lesser significance in secured loans.

Joint Loan or A Guarantor

You can take a joint loan with an individual who has a higher credit score. Thereby increasing the chances of getting the loan approved. In addition, the joint loan can be taken with a family member or a spouse too.

Documents

Before submitting the documents for the loan, try to increase the credit score. By working on your credit score, you are doubling the chances of getting the loan approved.

The documents you can attach to prove your creditworthiness are listed below.

  • Details of job history, salary, and pay stubs
  • List of assets: Home, car, property, etc.
  • List of unsecured debts: Credit cards, student loans, and medical bills
  • Tax Returns: W – 2s and 1099 forms from the last two years
  • Documents of alimony (paying or receiving) or child support (if any)
  • Bank Statement: For checking, savings, and CDs

Any document showing that you have become more responsible with your money can help you with a poor credit loan.

Any individual can avail of loans regardless of their credit score. Most lenders have made their loans schemes accessible and are willing to provide loans to individuals with poor credit.

All you need to do is provide adequate evidence of your financial status and credibility for the loan repayment.

Want to avail yourself of a poor credit loan? Contact a financial institution offering loans!

RELATED ARTICLES

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Most Popular

Recent Comments